Differentiation and USP
A business can charge a higher price if its product or service has a USP or is sufficiently differentiated from those of its rivals. This is because many customers are prepared to pay more for products with individuality or additional features.
If the demand for a product is price inelastic, there will be space for a price increase. In contrast if a firms product is price elastic, it may benefit from a price decrease.
Amount of competition
The amount of competition in a market will have a big influence on pricing. If there is very little competition in the market, a business can charge much higher prices because consumers cannot go to another…